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Yellow Cab Co-Op, San Francisco’s largest taxi company with about 530 medallion-holding drivers, is filing for bankruptcy, the San Francisco Examiner reported earlier this week.

News of the bankruptcy is perhaps the clearest indication of the growing dominance of ride-hailing apps Uber and Lyft in the city.

Thanks to the apps from Silicon Valley that allow freelance drivers to compete directly with established cab services, while offering passengers more convenience and lower prices for similar services, the entire taxi industry has struggled to compete in the past few years.

Although Yellow Cab officials have not explicitly named Uber and Lyft as part of the reason the company is struggling, it’s obvious the apps have had an impact on Yellow Cab’s business and are helping drive it toward bankruptcy.

Yellow Cab is the first high-profile casualty of the taxicabs’ battle for business in the city where Uber is headquartered. The cab company has directly blamed mounting traffic collision lawsuits and “business challenges beyond our control,” as the main cause of its current financial woes.

In a letter to shareholders dated Dec. 10, Yellow Cab’s President Pamela Martinez revealed that documents were being prepared to file for Chapter 11 bankruptcy “within a month,” which in essence means, any time now.

“We are in a midst of serious financial setbacks,” she told Yellow Cab members. Some of these financial setbacks “are due to business challenges beyond our control and others are of our own making,” she wrote. “Today we are faced with fiscal obligations that far exceed expected income.”

Martinez, however, was quick to iterate in the letter that “Yellow is still the best taxi brand in San Francisco,” and immediate former Yellow Cab president Jim Gillespie told the Examiner that the cab company still has a viable future. “We have the best color scheme there is in the world, we’ve got a lot of loyal customers, we still get a high volume of calls to our color scheme on a daily basis,” Gillespie insisted.

Except that these assertions demonstrate the denial still at play in the taxi industry, even as its wheels continue to skid and hit a snag. The “best color scheme there is in the world” is only helpful in a world where the best way to catch a ride is to stand on the curb with an outstretched arm toward a city’s open streets until a ubiquitous yellow car happens by.

We all know that’s not the world we live in anymore.

Where “hailing a cab” once entailed standing on the curb with an arm stretched out toward a city’s open streets to attract the attention of an empty cab, the phrase and accompanying gesture have since been demoted in favor of their digital equivalent: reaching for a smartphone in the pocket to “get an Uber.”

If taxi companies are in denial about the role taxi-hailing apps are playing in the industry, their future isnt rosy. History is replete with companies that are put out of business by disruptive business models because they refuse to adapt and change their businesses in line with new market realities, such as the small town print newspapers that folded when the Internet began to disrupt the media.

Uber and Lyft are legitimate disruptive business models, if there ever was such a thing. With a rating system for both drivers and passengers, the taxi-hailing services offer a different customer experience from end to end. Uber, for instance, places a strong emphasis on customer satisfaction with an array of impressive service offerings, including UberPool, UberX and black car.

Both Uber and Lyft also enjoy fewer regulations, advanced data analytics, and different cost structures, not to mention billions of dollars of venture-capital money (more than $60 billion, to be precise) for helping them dominate the market. In December alone, the same month Yellow Cab admitted it would have to file for bankruptcy, Uber and Lyft together raised more than $3 billion.

Meanwhile, as Yellow Cab’s Martinez was telling shareholders that her company used to transports over 5 million passengers every year and their goal is to “get them [passengers] back and even more,” San Francisco’s oldest and second-largest cab company, DeSoto Cab, already saw the impending market upheaval coming and swerved.

Last year DeSoto partnered with a Silicon Valley-based taxi-hailing startup called Flywheel and re-branded itself as FlywheelTaxi, tossing 80 years of history and an iconic local brand out the window in the process. The cab company repainted all of its cars from blue to red and shifted its marketing efforts to rides booked through the Flywheel app instead of street hails and phone orders. The app has since been stepping up competition against Uber and now accounts for 20 percent of DeSoto’s business.

If you had to guess which of San Francisco’s two biggest cab companies will be profitable in five years, FlywheelTaxi would be the smarter bet than Yellow Cab at this point. And if the insurgent taxi-hailing apps continue to gain traction, and traditional cab companies continue to bury their heads in the sand, taxi firms around the world can expect to face the same fate as Yellow Cab, or worse.

Uber appears to be doing to cab companies what Netflix and streaming did to Blockbuster video.

Getting back to overall business bankruptcy trends, California once again generated the largest percentage of overall bankruptcies with 15.30% in Q4 and 13.31% for the full calendar year. California was followed by Texas, which leap-frogged over New York and Florida as the state that generated the 2nd highest percentage of overall bankruptcies for the year. Virginia and Texas saw the largest percentage year-to-year leap in overall percentage of bankruptcies while New Jersey and Florida saw the largest decrease. The Q4 and full year Bankruptcy Court activity reflects California Central generating the largest percentage of overall bankruptcies by a large margin, which has historically been the case. The 3.63% of overall bankruptcies generated within Puerto Rico’s Bankruptcy Court in Q4 2015 reflects the economic challenges that territory is experiencing.

The Service industry, our economys largest employer, generated the largest percentage of overall bankruptcies in Q4 2015 with 32.08% and 34.70% for the full year. The 2015 percentage is down 7% from that industrys 2014 figure and down 16% from 2013. The slack has been picked up by the Finance, Insurance and Real Estate industry which saw its full year percentage jump 34% since 2013. Though not showing up in the top five in terms of percentage of overall bankruptcies, the Mining industry saw a huge leap in filings generating 6.17% of overall bankruptcies in 2015; this figure compares to 1.36% in 2014 and 0.42% in 2013. This sector continues to feel the effects of low fuel and natural gas prices.

Low interest rates, a robust capital market with easy access to financing, out-of-court settlement alternatives, a slightly improving economy, the perceived cost of filing for bankruptcy and tighter bank lending decisions have driven the number of bankruptcy filings down over the last six years. Additionally, the recession eliminated many of the troubled companies, so the remaining relatively healthy businesses are able to borrow with little fear of raising rates keeping the filing rates down.

How long will the bankruptcy filing numbers stay down? That is anybody’s guess, but we do feel the number of business bankruptcy filings has indeed leveled and will stay at this level for a bit; however, there are plenty of factors out there indicating that an overall increase in business bankruptcies may not be too far off. Interest rates are rising, albeit slowly, but eventually they will get to the point where they will prevent the small to mid-sized business owner from taking on more debt and bankruptcy will have to be considered. A couple of speed bumps in the overall economy could also push filings right back up again. We are certainly seeing this in the public company sector where falling oil prices, volatility in China, shrinking world trade, rising debt and weak corporate loans resulted in a 46% increase in bankruptcies in 2015. In short, those key indicators that could bump up bankruptcies have already begun to appear, which means 2016 could be an interesting year in the corporate bankruptcy sector.

WILMINGTON, Del. American Apparels (APPCQ.PK) chief executive told a bankruptcy judge on Wednesday the retailer could become embroiled in drawn-out litigation if it accepted a takeover bid being championed by its founder and former CEO Dov Charney.

Los Angeles-based American Apparel Inc, known for its Made in the USA fashion and sexually charged advertising, joined other teen-focused retailers by filing for bankruptcy in October due to changing shopping habits.

The company is seeking court approval of a bankruptcy exit plan backed by a group of hedge funds. Charney has objected and is trying to convince the judge a takeover backed by competing investment funds, Hagan Capital Group and Silver Creek Capital Partners, is a better deal.

Last week, the companys board rejected the $300 million takeover bid involving Charney.

US Bankruptcy Judge Brendan Shannon in Wilmington, Delaware, must decide if the hedge fund-backed plan, which has the support of a committee of the companys creditors, is fair and feasible.

CEO Paula Schneider said the support of hedge funds that hold its bonds, including Monarch Alternative Capital, was the most critical factor in determining the best way to end the bankruptcy. She said the support of American Apparels bondholders was paramount.

The affiliation with Dov Charney was not a problem, Schneider testified.

Charneys attorney, Steven Kortanek, repeatedly challenged the way the companys investment banker from Moelis, Robert Flachs, reviewed the Charney-Hagan bid. The judge later called the line of questioning effective.

Charney founded American Apparel in 1989, but was fired in December 2014 for allegedly misusing company funds and failing to stop a subordinate from defaming former employees. He has denied the allegations.

Schneider told the court that when she joined a year ago, she found a company without cash, long-term planning or proper structure. There was no org chart. Seventy people told me they had reported to Dov Charney.

American Apparel has not been profitable since 2009 and the company blamed its bankruptcy in part on the cost of lawsuits linked to Charneys volatile tenure at the helm.

Charney scribbled on a legal pad throughout the hearing and regularly passed folded notes to his attorney. He was expected to take the stand on Wednesday, but his testimony was pushed to Thursday.

Im anxious, Charney told Reuters at the hearing. I put a lot of years into this company.

NEW YORK–(BUSINESS WIRE)–National law firm Seward amp; Kissel LLP is pleased to announce that Robert
J. Gayda has joined the Firm’s New York office as Counsel in the
Bankruptcy and Reorganization group. He previously served as Counsel
with Chadbourne amp; Parke LLP in their Bankruptcy and Financial
Restructuring group, where he was also seconded to the Royal Bank of
Scotland’s (“RBS”) Global Restructuring group from 2009-2010.

“Bob is a talented attorney and an excellent addition to the Firm,” said
Seward amp; Kissel Managing Partner Jim
Cofer. “He has a strong background in areas of key strategic
importance to our bankruptcy practice, and we look forward to having him
as a colleague.”

Mr. Gayda’s practice focuses on bankruptcy and financial restructuring.
He has experience representing clients in a wide range of matters, from
out-of-court restructurings to bankruptcy litigation. Mr. Gayda’s
clients include creditors’ committees, hedge funds, banks, insurance
companies, bondholders, agents for lender groups, and other creditors in
all phases of restructuring. He also counsels entities seeking to invest
in distressed assets as well as companies considering filing for
bankruptcy protection.

“Bob will be a significant asset to our group,” said John Ashmead, the
head of the Firm’s Bankruptcy and Reorganization practice group. “His
broad experience, both in-house at RBS and as counsel to a variety of
creditors and debtors, is of tremendous value. We know our clients will
benefit significantly from his background and contributions.”

“As I carefully considered this next step in my career, the more I
learned about Seward amp; Kissel, the more I realized it would be a natural
fit for me,” said Mr. Gayda. “The type and caliber of work being done
here, combined with the talent of my new colleagues, provides me with a
solid platform from which to grow my practice and serve my clients.”

Mr. Gayda holds a JD from the University of Pennsylvania Law School
and a BA (summa cum laude) from West Virginia University.

About Seward amp; Kissel LLP

Seward amp; Kissel LLP, founded in 1890, is a leading US law firm with an
international reputation for excellence. We have offices in New York
City and Washington, DC Our practice primarily focuses on corporate,
litigation and restructuring/bankruptcy work for clients seeking legal
expertise in the financial services, corporate finance and capital
markets areas. The Firm is particularly well known for its
representation of major commercial banks, investment banking firms,
investment advisers and related investment funds (including mutual funds
and hedge funds), master servicers, servicers, investors, distressed
trade brokers, liquidity providers, hedge fund administrators,
broker-dealers, institutional investors, and transportation companies
(particularly in the shipping area).

UPDATE [Friday, January 15]: Just a few days after defaulting on a promissory note caused SFX stocks to plummet even further, the company has announced that they have received $20 million in new financing.

Its been an ugly year for SFX. Reuters last month reported that the EDM conglomerate is carrying $300 million in debt; in September they were sued by investors because of their plummeting stock prices; all of this followed a debacle in which SFX subsidiary Beatport froze payments to their label partners. As THUMPs Michelle Lhooq phrased it in her 2015 article about the increasing size and scale of the EDM industry: Dance music might not be ready for Wall Street just yet.

But it gets worse: this week SFX released a statement saying they may file for bankruptcy. In order to facilitate its reorganization, the company may consider utilizing the available protections under the federal bankruptcy laws, they said. The company may not have enough cash on hand to survive 2016, the statement says, and theyve hired a turnaround firm to explore their options for restructuring in bankruptcy. So go grab another box of popcorn because it looks like this slow-motion implosion is going to burn bright into the new year.

For many people, declaring bankruptcy is not only a financial decision, but a personal one as well. Therefore, no one can really advise you if it’s right for you. However, what is certain is that due to continuing rising costs of living, US trade inequality where costlier imports are coming in than costly products being exported and jobs still continuing to be transferred overseas despite what the politicians say, for many individuals the decision to declare bankruptcy regretfully is one of financial survival.

Additional factors such as the stigma of filing for bankruptcy, has dramatically lessened over the years as our economy continues to weaken and the gap between the wealthy and the middle class and poor continues to grow. Moreover, as most readers are aware the federal government has deliberately carved out a place in the IRS Code (for example a Chapter 7) for individuals who need a fresh start through the filing of a bankruptcy.

In light of the preceding, consider the following questions and answers:

1) Can you file for bankruptcy?
If you have enough money to pay your creditors, you may be ineligible to file for bankruptcy.

Q: How would the bankruptcy courts know if you are qualified to file for bankruptcy?

A: You will be required to complete certain paperwork, show recent tax filings and pass the means test created within the Bankruptcy Reform Laws. If you make less than the median income established in California, you may qualify. On the other hand, if your income exceeds that figure, and you have enough left over after paying your necessary monthly expenses to cover most of your debts, you might not be able file.

2) Your immediate future is bleak and you do not anticipate it getting better without filing bankruptcy.
Q: But what if you know your hardship is temporary? What if you foresee better cash flow in the next couple of months or 6 or even eight months from now?

A: You may want to wait it out. When your financial circumstances improve, you can pay down more of your debts. But then again, only you know if you can endure the pressure of collections letters, services such as your cell phone being reduced/cut-off, debt collectors calling you and creditor lawsuits being filed against you.

3) OK, but what if: a) your debts are long term, b) if your income continues to dwindle, c) there is a no light at the end of the tunnel and d] most debts are unsecured?

*Other debts like student loans, certain tax debt, certain legal bills and child support arrearage may not go away even though they are unsecured. In addition, liens on a secured debt like a mortgage or a car loan may remain your obligation to pay unless there is a cram down. So look at your liabilities: IF the bulk is dischargeable, you may wish to file a Chapter 7 bankruptcy. (There is also a Chapter 13 Bankruptcy, but that is for another day).

4) Be sure you thoroughly understand and accept the downside of bankruptcy and the conditions that must be met by you in order to be successful in your bankruptcy filing.

Q: What exactly do you mean the downside and the conditions of bankruptcy?

A: For example, your credit rating score will drop and the bankruptcy filing will be on your credit report for a long time. Also, as written there are some simple conditions that must be met. For example, you will be required to take a Pre-Bankruptcy Credit Counseling Course after you file your petition for bankruptcy. The course is inexpensive and takes usually about 60 to 90 minutes to complete. There is also an inexpensive Post-Bankruptcy Debtor Education Course. The course is usually a little more than 2 hours and must be completed no later than the 45th day after the creditor’s 341 meeting. Both courses can be taken on-line by computer or by telephone. Joint bankruptcy filers can take the courses together.

Thank you for taking the time to read this article on Bankruptcy.

Please note: The information provided above is general and must not to be relied upon for your specific legal needs.

* You should always contact an attorney to answer your legal questions. For more information about bankruptcy or other legal matters, contact the Law Offices of Morton J. Grabel in Temecula at (951) 695-7700. Grabel is a graduate of an American Bar Association Law School, possesses an MBA, is a Licensed nursing home administrator in good standing and is also a licensed real estate broker. He formerly served as the president of the Mt. San Jacinto/Hemet Bar Association, for the years 2013-2014.

In November, when Londons oldest school for cab drivers announced that it would be taking its maps down and closing its doors, it partially blamed Uber for its declining enrollment. And now that San Franciscos largest cab company has announced that it will be filing for bankruptcy, you can guess what apps its blaming too. Yellow Cab Co-Op sent a letter to shareholders announcing its financial struggles, and it said that ride-hailing services like Uber and Lyft had contributed to its downfall (and so did a number of lawsuits related to collisions involving its cars).

In the letter, which was obtained by the San Francisco Examiner, Yellow Cab Co-Op president Pamela Martinez wrote:

We are in a midst of serious financial setbacks. Some are due to business challenges beyond our control and others are of our own making. Today we are faced with fiscal obligations that far exceed expected income.

The cab company has alleged that not only has Uber taken a large percentage of its customers, it has also made off with a number of its drivers as well. Yellow Cab has about 530 drivers, compared with a reported 16,000 Uber drivers in and around San Francisco — which is also where the company is currently headquartered. If it indeed files for Chapter 11 bankruptcy, Yellow Cab will be the first major cab company to file for bankruptcy in what The Verge calls the post-Uber era.

At least Uber has caused at least one positive change in the taxi industry: it has made cab drivers nicer. Scott Wallsten, an economist with the Technology Policy Institute, collected information about every cab ride in New York City from 2009 to 2014. Unsurprisingly, he discovered that the number of taxi rides decreased after Uber started appearing on New Yorkers phone screens in May 2011. But he also learned that the number of complaints to the New York City Taxi and Limousine Commission also decreased after Uber arrived, writing:

The data reveal that the number of complaints per taxi trip in NYC has declined along with the growth of Uber, even when controlling for underlying trends and seasonal events that may affect taxi use. The results suggest that customers who used to complain now take their business elsewhere and that taxi drivers are responding to competition from Uber by increasing the quality of their own service.

He found similar results after examining the number of taxi-related complaints in Chicago. After Uber arrived in the city, the number of complaints about factors that the drivers could control — air conditioning and heat, credit card problems and the drivers attitude — also declined. So its good that Uber might be giving taxi loyalists a better experience, but eventually, there may be fewer taxis left for them to enjoy.

His office says Emanuel is 100% opposed to a state takeover of CPS and bankruptcy.

Instead, Emanuel urged the governor to pass a state budget and give CPS more money to cover its pension costs.

If the proposal is to go anywhere in Springfield the top two democrats need to allow a vote.

Senate president John Cullerton released a statement saying in part “This is not going to happen,” adding, “It’s a far-fetched notion that the state is somehow in the position to take over the Chicago schools.

Speaker Madigan piled on–in a statement saying the governor “hopes to use a crisis to impose his anti-middle class agenda.”

Rauner sees it differently.

Dozens of other states have the opportunity their school districts and municipalities to go bankrupt we believe that is good management practices, he said.

The supplier of half the coal burned in Minnesota power plants, Arch Coal Inc., filed for bankruptcy protection but pledged no interruption in mining and shipments to customers like Xcel Energy and Minnesota Power.

The nations second-largest coal producer filed for Chapter 11 reorganization on Monday and said a majority of its primary lenders had agreed to cut $4.5 billion in debt that it couldnt repay because of the depressed coal market.

It is the latest sign of distress in the US coal industry, whose main customers for thermal coal are electric utilities. Three other coal companies have sought bankruptcy protection in the past year, squeezed by weak demand and low prices as utilities turn to cheaper, cleaner natural gas power generation.

Arch Coal operates two mines in the Powder River Basin in Wyoming, including the largest, which shipped 48 percent of the coal purchased by Minnesota power plants in 2014, according to the US Energy Information Administration. Minnesota power plants burned coal for 38 percent of the electricity generated in the state, according to September 2015 data, the most recent available.

Minnesota Commerce Commissioner Mike Rothman, whose agency tracks state energy supplies, said through a spokesman that officials are closely monitoring the situation, but declined to comment in detail. Xcel and Minnesota Power also said they are watching developments and dont expect problems.

Coal power plants generally store several weeks of fuel, and use multiple suppliers, although Arch is the largest in Minnesota.

We have been well aware of the potential filing by Arch, said Amy Rutledge, spokeswoman for Duluth-based Minnesota Power, which burns Arch coal at two plants. To help offset any potential impact, we have grown our coal inventory levels to avoid any disruption.

Arch warned investors in November that it couldnt repay its more than $5 billion in debt. The stock has been trading at under $1, and dropped another 30 percent Monday to 57 cents. If the bankruptcy plan goes through, that stock would be worth nothing, with all equity going to senior debt holders.

After carefully evaluating our options, we determined that implementing these agreements through a court-supervised process represents the best way to solidify our financial position and strengthen our balance sheet, John W. Eaves, Arch chief executive, said in a statement.

Minneapolis-based Xcel, the states largest power company, relies partly on Arch to supply its largest coal burner, the Sherco power plant in Becker, as well as the Allen S. King plant in Bayport. Another regional customer is Dairyland Power Cooperative of La Crosse, Wis., a wholesale power supplier to municipal and cooperative utilities in four states, including Minnesota. A spokeswoman said the co-op has sufficient stockpiles at two Arch-supplied plants on the Mississippi River.

The coal market has been hammered by lower-cost natural gas — a product of the fracking boom in North Dakota and other states — and enforcement of environmental regulations, like the long-stalled mercury and toxic emissions rule that took effect last year. Even more coal power plants are expected to close under the federal Clean Power Plan to reduce greenhouse gas emissions.

Basically, you have a coal industry that is designed for what coal demand looked like a few years ago before a substantial amount of low-cost natural gas was available and before a lot of environmental regulations, said Morningstar analyst Kristoffer Inton. What the industry needs is for production to come down.

Inton said cutting output would push up prices, but companies like Arch that have high levels of debt have largely kept on producing to service their debt.

Leslie Glustrom, a Colorado-based clean energy advocate who has written two research reports on the future of Powder River Basin coal, said its mines increasingly will be forced to dig deeper to reach new reserves, adding to production costs at a time of price pressure.

Minnesota and any state dependent on Powder River Basin coal should be taking a hard look at what is going on in the coal industry, and consider the unthinkable thought that we cant be assured of long-term coal supplies in this country, Glustrom said Monday. That has massive implications for the US electrical grid.

Minnesota got a hint of alarm two years ago, when the prolonged cold weather system called the Polar Vortex and other factors slowed down railroads that haul coal from Wyoming. Utilities grew alarmed as their coal piles dwindled, and some cut back coal-fired generation. Heading into this winter, Midwest power plants, on average, had 71 days of supplies of the Powder River type of coal, a 47 percent increase over a year ago, according to federal data.